Barkindo Seeks OPEC’s Commitment In Achieving Output Cuts

The secretary-general, of the Organisation of Petroleum Exporting Countries (OPEC), Mohammad Barkindo, has urged members of the producer group and its 10 allies “to remain firm in achieving” their output cut goals.

Barkindo acknowledged that initial production and supply data from the 24 participating countries showed “various levels of conformity” and urged them to implement these cuts “in full, and in timely fashion. No one party can perform the role of a ‘swing producer’,” he added in a statement.

At the last OPEC meeting in Vienna, the group’s members agreed to slash output by 812,000 b/d, with Russia and nine other non-OPEC allies committing to a cut of 383,000 b/d for the first six months of 2019.

Barkindo singled out Saudi Arabia, which he said has “adjusted its supply by more than the required levels. Saudi Arabia self-reported January production of 10.24 million b/d, its lowest monthly average since May 2018, and below its quota of 10.31 million b/d under the cut agreement.

Saudi Arabia has decreased its production by 850,000 b/d since November, when it pumped a record high 11.09 million b/d. “Our primary objective is to ensure that the oil market remains in balance throughout 2019 and beyond in order to build on the success of the past couple of years,” added Barkindo.

The OPEC’s 14 members pumped 30.81 million b/d in January, down from 31.60 million b/d in December, according to the secondary sources used to measure the group’s output. Russia’s compliance has not been up to the expected level, according to the data.

Russia produced 48.113 million mt, or 11.376 million b/d in January, still 185,000 b/d above its output quota of 11.19 million b/d, the data showed. Igor Sechin, the CEO of Russian oil giant, Rosneft, recently criticised the agreement in a letter to President Vladimir Putin, describing it as a strategic threat to the Russian oil industry.

Sechin said in the letter that the supply cuts with OPEC played into the hands of the US, which has emerged as the world’s largest oil producer.

Meanwhile, oil prices rose yesterday as producer club,the Organization of Petroleum Exporting Countries (OPEC) said it had cut supply deeply in January and as U.S. sanctions hit Venezuela’s oil exports.

The U.S. West Texas Intermediate (WTI) crude oil futures were at $53.60 per barrel up 50 cents, or 0.9 per cent, from their last close, while the International Brent crude futures were up 0.8 per cent or 51 cents, at $62.93 per barrel.

Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore, said oil prices were boosted after “Saudi Arabia announced it was cutting daily production and exports by a further 500,000 barrels per day (bpd) on top of its agreed OPEC quota cut.”